NEWSFLASH: Hurricane Sandy aftermath adds new urgency to ILA talks

Friday, December 07, 2012

A wide group of U.S. companies are urging the International Longshoremen’s Association (ILA) and its employers to “make every attempt possible at reaching agreement on a new contract” when they begin meeting once again next week.
The National Industrial Transportation League, the nation's largest shipper organization, also contends that the need for building materials in the wake of Hurricane Sandy has added new urgency to the need to prevent supply chains from being disrupted.
The ILA and employers represented by the U.S. Maritime Alliance (USMX) are meeting in Delray Beach, Fla., on Monday in an effort to negotiate a new contract that expired Sept. 30. The two sides agreed to extend their current contract until Dec. 29 and work with a federal mediator in September. But they have held few meetings and in November they exchanged sharp words, with the USMX asking the ILA to engage in “serious” negotiations and the union complaining that employers were engaging in “misleading rhetoric and scare tactics.”
Today, a group of 68 trade organizations wrote to Harold Daggett, president of the ILA, and James Capo, chief executive officer of USMX, asking them to “stay at the negotiating table until a deal is reached even if this extends beyond the current deadline of December 29."
The group represents a wide swath of industry associations, ranging from the National Retail Federation to the Agriculture Transportation Coalition to the Alliance of Automobile Manufacturers.
The NIT League sent its own letter to Daggett and Capo (http://www.nitl.org/NITL-PORTS20712ltr.pdf) in which it said "any disruptions in the operations of our national port system would have devastating impacts resulting in enormous losses to retailers, manufacturers, farmers, municipalities, consumers and others who are all dependent on freight moving through our nation’s ports. These impacts would come at a critical time, just when our economy is showing positive signs of a recovery."
The letter signed by Bruce Carlton, NIT League president and chief executive officer, said "the horrific outcomes resulting from Hurricane Sandy have brought tragedy to millions of Americans in the northeast, and they would face additional hardships if they are not able to receive necessary supplies due to port closures. This is another reason why the two sides must try to reach common ground on a new contract."
Peter Gatti, NIT League's executive vice president, said those materials are need to rebuild damaged to homes, businesses, and infrastructure from storm in the New York, New Jersey and other states last month. He said a strike could result in delays of much needed materials needed for rebuilding.
However, Noël Perry, a managing director and senior consultant at FTR Associates, pointed out that many building materials such as lumber and concrete are sourced in the United States or Canada and can be shipped by rail or truck.
He also pointed out the deadline for the contract is coming during the winter when there is lower demand for building materials.
But Tony Callahan, a Kennesaw, Ga.-based consultant who specializes in supply chain issues for the building materials industry, said seasonality is a double-edged sword, because most building supply companies have also reduced inventory that could cushion a strike.
He agreed that materials such as lumber can be sourced domestically, and products such as nails and screws can be trucked from the West Coast at relatively low cost since they are so small. He noted that many products used for remodeling - lighting, for example - is sourced from overseas, so that builders trying to repair homes damaged in the storm might be affected by a strike, depending on how long it goes on.
“It’s not a positive,” he said. - Chris Dupin